Introduction

In Financial Peace University, Dave Ramsey teaches the basic “three to six month’s worth of expenses in a good money market account.” But the preparation ends there at the Baby Step 3 Emergency Fund. I’m not knocking this advice, because I think it is good advice. My family has a rainy day fund such as this for unexpected financial problems.

What happens, though, if for some reason that stash of cash is inaccessible and it is needed sooner than later? What if there is a run on banks? What if there is a global computer virus that turns digital money in online savings accounts into a big fat zero? Lots of weird stuff can happen, especially in today’s unstable world.

Let me present another potential way to put together a rainy day fund. In my own personal plan, I have several layers of emergency funding. And just like Dave talks about, remember that an emergency fund is more in line with an insurance policy—not a way to do something “big” with money. Yes, piles of money will be lying around not growing as fast as they could be, and that’s okay.

Step 1: Purchase a Quality Safe

Depending on how many items need to be stored and how big the safe needs to be, costs for a good safe range from $200 to $1,000. I realize that may seem like a lot of money, but from personal experience, a safe is well worth the investment. Another personal note on safes: always go a little bigger than you think you need to. I bought my family’s current 1.2 cubic-foot safe around ten years ago. This size has been too small for our needs for the last four to five years. I recently added an extra safe about twice as large as the first, primarily to hold all the various Jones family legal documents. Be sure to buy a safe that is well built and has a high fire rating.

Step 2: Put $3,000-$5,000 in Your Safe

Depending on personal comfort level and “prepper” attitude, I would put anywhere between $3,000 to $5,000 cash in a safe. This is the first level of an emergency fund. And no, just like Dave talks about, this isn’t pizza money for dinner or a, “I need to go buy something on Craigslist right now” fund either. Pull together a decent-sized collection of $5s, $10s, and $20s for this first level of an emergency fund. In this way, if a bank account can’t be accessed in a crisis, there is cash at hand that will carry a family through a minor emergency for at least a few weeks.

Step 3: Place $2,000-$5,000 in a Savings Account at the Same Bank as Your Checking Account

Be sure you have both accounts linked together to move money back and forth as needed. This is your second level of an emergency fund. In this way, when you have a financial problem, you can immediately transfer the money you need from savings to checking to spend it immediately via check or debit card. This third step is most likely adequate for the majority of your “regular” emergencies such as car repairs, smaller home repairs, and minor medical emergencies. The next two steps will be the “icing on the cake” for your major, abnormal life emergencies.

Step 4: Save $10,000-$30,000 in a “Higher Yield” Savings Account

This account will be your largest savings account, closer to your three to six months of expenses. Place this money in a separate bank account that will take a few days to access the money. You don’t want to make it too easy to access. I recently found one of the highest percentage yield online accounts over at MySavingsDirect.com. At the time of this writing, it is 1.00% APR. There are many online banks like this. Check out this link at Nerd Wallet.

This next step is going to seem completely “geeky,” but to fight a yearly inflation rate of anywhere between 3 to 5 percent on your primary emergency fund in step four, I would take the high number of 5 percent and subtract the bank account interest gain of 1 percent, leaving you with 4 percent that you are “losing” out with your financial purchase power in your emergency savings due to inflation. Next, I would set up a small recurring deposit into this account to cover inflation losses. So, if a base emergency savings is $10,000, that amount times 5 percent inflation means a loss of around $500 per year. You are making 1 percent ($100) in interest and will need to cover the remaining $400 lost due to inflation. $400 divided by twelve months equals about $33 that would need to be deposited into the account each month. In this way, the three to six months of cash reserves will not lose its purchasing power in the event of a large emergency. Put this small deposit on autopilot between bank accounts. In the words of the great Ron Popeil, “set it and forget it!”

I have this “inflation busting” strategy set up with all our layers of emergency funding. Every month, I add $20 to our cash pile in our home safe (Step 2). I also have a small recurring transfer/deposit that automatically moves from our bank’s checking account over to our savings account (Step 3). All of our emergency money sources now keep pace with inflation.

Step 6: Max Out Your HSA Account

This final step is for those who have high deductible health insurance with an HSA account. Max this account out every year. In the year 2015 (you will need to check these numbers for the current year), a single person can contribute up to $3,350 per year. A family can contribute up to $6,650 per year. These amounts are 100 percent tax deductible (at least for now!) because they are withdrawn in pre-tax dollars. Medical emergencies are the number one reason people end up declaring bankruptcy. I would treat my HSA account as another layer of an emergency fund to protect my family against this bankruptcy statistic. Don’t be tempted after a good health year to cut back the amount deducted from each paycheck toward HSA the following year. Keep on plunking in the maximum amount and treat that HSA account as another layer of emergency funding in the area of health care. At some point it will be needed, so you may as well plan and prepare for a health care emergency.

Conclusion

This six-step approach is a more deliberate, organized plan than just sticking “three to six month’s worth of expense money in a money market account.” A good emergency plan prepares for the worst-case scenario occurring to the banking system. Because this is a debt-laden economy completely run by susceptible computer systems, trouble is inevitable if relying solely on the government and computers to be 100 percent reliable every day. Prepare for the worst and pray for the best!

Several years ago, I turned forty. This was an age that caused me to stop and reflect on my physical health. I felt tired all the time. I was stressed out. I was moody and would get frustrated with any kind of problem, large and small. I was going through some of the most difficult changes in my personal life that one can experience. I wasn’t happy with much of anything. I knew something had to change, and I took massive action as a result. Over the last six years, I have been on an amazing journey that has led to a healthier and happier level of living.

In the book The Power of Full Engagement (2003), authors Jim Loehr and Tony Schwartz assert people need to learn two new rules when it comes to energy and performance. First: recognize that energy is the fundamental currency of high performance. Second: performance, health and happiness are grounded in the skillful management of energy. Later on, Jim Loehr added a third important rule: the stories a person tells one’s self and others drives the way he or she gathers and spends energy.

Energy management goes beyond establishing morning routines. It encompasses whole life management. The better a person treats their body through food fuels energy. A stronger body through aerobic exercise and strength training adds a quality of life that many don’t understand. Better quality sleep allows the physical body to rest, recover, and repair itself which results in greater energy to do more.

In today’s culture, people have taken on the mindset that burning the candle at both ends is a badge of honor to “get ahead.” People go to bed late and wake up early; they eat junk food meals on the run. They sit in front of computer screens for twelve hours a day. Exercise is not prioritized, or non-existent. Is there any wonder there is an obesity epidemic in the modern age?

Conventional wisdom says sleep less to get ahead. Cut corners in health and wellness to climb to the top of the ladder faster than the guy in the cubical next door. Yeah, success might come faster, but so might a heart attack!

There is a better, healthier way to do things. Now, let’s take a closer look at living a richer life through proper eating, exercise, sleep, emotional habits, and sexual energy control.

Strategy #1: Eat Better

Eating the right foods at the right times has tremendous potential to create a good energy balance to live a high quality life. The average American, though, wakes up in a rush, runs through a Starbucks drive-thru to grab a high sugar and cream combo coffee and a high calorie pastry to go with it. At work, they grab other high carb and high sugar snacks to sustain them until lunch. At lunch, they eat fast food; they make more bad snack choices in the afternoon, and then they top it all off with a heavy dinner late at night.

But, with just a little bit of forethought on food intake, a healthier lifestyle can be achieved. It is possible to avoid putting so much bad stuff into one’s body. These bad foods actually make people hungrier, bigger, and less energetic all at the same time.

[Disclaimer: As a Christian, there are certain aspects about sex in this book that I am in no way endorsing. Read at your own risk. You have been warned. No hate comments, please!]

The biggest take away for me from this book is the slow carb diet (SCD). After reading the book, I began a focus on consuming more protein at specific intervals throughout the day, especially first thing in the morning. I also try to avoid bad carbohydrates whenever possible.

I don’t follow slow carb religiously, just a few of the basic tenets. But, with this diet plus exercising four days a week for twenty-five minutes each workout, I was able to sculpt my body. I dropped an extra twelve to fifteen pounds, moving from 175 pounds down to a consistent 160 pounds within a few months. I’ve never been a big guy, but even my family noticed a difference when I went on this food and exercise regimen.

Focus meals on lean proteins such as eggs, egg whites, meats, nuts, etc. Eat the same few meals over and over again, especially for breakfast and lunch. You already repeat meals, anyway; now you’re just picking new default meals.

Eat 30 in 30. Translation: Eat 30 grams of protein within 30 minutes of waking up. Tim Ferriss and others on SCD claim this is the biggest change in diet that will affect weight loss.

Eat plenty of veggies.

Don’t eat fruit. (Fructose –> glycerol phosphate –> more body fat, more or less.) Avocado and tomatoes are the exception to the rule.

Avoid “bad” carbs such as “white” starchy carbohydrates (or those that can be white). This means all bread, pasta, rice, potatoes, and grains.

Eat every three hours.

Enjoy one “cheat” day per week. This helps with plateauing weight issues when you are on the same diet every day.54

Strategy #2: Move Your Body!

A few years ago, I heard some wise advice that has stuck with me:

“How well we live our lives in our forties and fifties will set us up for how healthy we will be in our sixties, seventies, and beyond.”

When I heard this advice, I had just turned forty. I had exercised some in the past, but nothing consistent. I was not a healthy eater. I mentioned earlier that I was tired a lot, as well as stressed out at work and home. I came to the realization that if I wanted to age well, I knew I needed to make some serious lifestyle changes.

I have zero excuses, too. My workplace has an excellent free workout facility for its employees. So, I began to develop an exercise routine that wasn’t difficult or strenuous but got me into the gym at least four times every week. I also try to work out at the same time each day. I attempt to schedule my workouts in the late morning or early afternoon, right around my lunch hour. For whatever reason, I landed at this time due to my personal schedule and energy levels. It seems to have worked the best for me, so I’ve stuck with it.

Many people have physical goals they are trying to accomplish with their own unique exercise plan to get them there. For me, I strive for a balanced exercise routine of four to five days a week. I’m not interested in running marathons, half marathons, or even 5k’s. I have no desire to look like Arnold Schwarzenegger or Paul Michael Levesque. With a large family and work responsibilities, I have time limitations. I have to keep my physical body “tight and right” in an optimal time frame.

I keep my exercise routine to a simple twenty-five minutes and I’m done. I do cardio on an elliptical machine two to three times a week—Mondays, Wednesdays, and sometimes Fridays. On alternate days, Tuesdays and Thursdays, I do a cardio warm-up on an elliptical for ten minutes. Then, I spend the remaining twenty minutes weight training with nautilus-style machines.

This exercise routine, combined with my protein-eating habits described in the previous section, has produced results. I have been able to trim off ten to twelve pounds of excess weight, sculpt my body, and stay at this level for over three years. With this twenty-five minute routine, four days a week, I spend a minimal time working out, and it has increased my energy to a high degree. I also need less sleep than I ever have before.

Want more energy? A methodical, consistent, and focused exercise routine really is a game changer when it comes to energy management.

Strategy #3: Get Some Quality Sleep

Sleep. Some don’t get enough. Others get too much. Either way, the right amount is important for energy management. When I was younger, I didn’t eat well. I didn’t exercise much. My sleep patterns were inconsistent. As a result, my energy levels were all over the place during the day as well as from day to day.

Over the last few years, though, I have established better sleep patterns. I attempt to go to bed the same time each night, around 10:00 p.m. I wake up the same time each morning, close to 4:15 a.m. These sleep habits combined with better eating and exercise have led to higher energy levels. I don’t need near the amount of sleep that I used to. I accomplish more at work. I’d also like to think that I’m a lot more pleasant person when I arrive home at the end of the day to greet my family in the evening. I have energy still left in the tank to pour out to the people I love the most.

I believe establishing good habits in the areas of food and exercise will result in six to eight hours of sleep. A person will wake up more rested. Of course, some people need more sleep than others. I get that part of it. I’ve always been on the low end of the sleep cycle. Others may need eight to ten hours of sleep. I’m sharing my own experience. This is what I have discovered in my own experiments in energy management.

Quality of sleep is an important factor for the greatest impact on minimal sleep. Here are a few sleep hacks I’ve picked up along the way to achieve better sleep quality:

Be careful of caffeine intake during the day, especially any time later than mid-afternoon.

Get 20–30 minutes of exercise each day, but don’t exercise in the evening hours. That could energize you too much before bedtime.

A short, 20-minute power nap in the early afternoon (if possible to get away with taking one!) can be a game changer for daily energy levels and mood.

If possible, establish a consistent bedtime as well as wake up time. This is a lot bigger deal than people realize. Do this one thing and a lot of problems will disappear.

Keep the room temperature on the cool side whenever possible.

Keep the room as dark as possible.

White noise generators or small fans help block out some of the background noises that may keep us awake or wake us up in the middle of the night.

Keep cell phones in a different room, or at least turn on the “Do Not Disturb” feature so that email alerts, text messages, or phone calls won’t disrupt sleep in the middle of the night.

Avoid using bright screens before bed such as TVs, laptops, tablets, and smart phones. Quick side note: In the latest version of Apple iOS, there is now a special “Night Shift” screen setting to help with this problem.

Consider melatonin supplements if needed.

Establish a regular “getting ready for bed” routine that cues the body that it is time to sleep.

In my experience over the last three years, quality sleep (not always quantity) is one of the keys to having more energy.

Strategy #4: Control Your Emotions

To most people, I’m sure I appear to be pretty stable and even-keeled when it comes to my emotions, at least in public anyway. I don’t get crazy enthusiastic about anything (which could possibly be an issue). But, I don’t grow upset about most anything, either. In public, I may not appear to struggle with emotional ups and downs, but in private, I do.

I don’t like surprises. I don’t like major, last-minute changes. I don’t like unexpected problems. When I encounter these issues in my life, I tend to have a strong emotional response to them. I lose self-control. I become angry, upset, and judgmental. I want things my way or not at all. “How dare you turn my life upside down by bringing your problem into my world and handing me a headache to deal with?” This is the attitude and self-talk that tends to come out of me.

What happens, though, when people lose control of their emotions? Valuable energy is wasted on problems that are oftentimes out of the person’s control anyway. Nothing can be done about them, but people tend to stew, fret, and be upset anyway. This type of emotional response results in exhaustion and energy-depletion. Joyce Meyer says, “It’s so important to realize that every time you get upset, it drains your emotional energy. Losing your cool makes you tired. Getting angry a lot messes with your health.”

On almost any given day, there will be problems that trigger emotions that pull people away from where they need to be. Many have a tendency to overreact to these problems, losing valuable emotional energy on them. Instead of getting upset and angry, seek out solutions to those problems and take action. Make a shift in mindset and energy to seeking solutions and taking action—a much better way to control emotions. Lee Iacocca, the former CEO of Chrysler Motors said, “In times of great stress or adversity, it’s always best to keep busy, to plow your anger and your energy into something positive.”

For the Christian, prayer is always an excellent, positive first step in attempting to deal with problems in which you have zero control. In fact, prayer should always be our “go to” response when we encounter difficulties. I know I can always run to the Father when I feel like life is out of control. When nothing I am doing or could do will make a positive impact to turn the situation around,

I know God can take care of it. We serve an awesome, all-powerful, all-knowing God. Nothing is too big for Him. Nothing catches Him by surprise. He promises those who seek Him will find Him. “Ask and it will be given to you” (Matt. 7:7 NIV).

Another helpful suggestion I have about emotional control is the practice of meditation. Deep breathing, mindfulness meditation has done wonders for me. Now, anytime I become stressed, I find myself doing these breathing exercises and not holding onto the stress within my body. I attempt to release it as fast as possible through these breathing exercises. A calm confidence replaces my stress and I am able to deal with problems in a positive way.

Successful people have learned how to handle their emotions. They have learned how to channel negative, energy-depleting emotions into positive action. This flips the whole equation around and gives them more energy. Gaining emotional control will result in more high-energy, high-impact days. Paulo Coelho said, “When you are enthusiastic about what you do, you feel this positive energy. It’s very simple.”

Strategy #5: Control Your Sexual Urges

Sexual energy is a lot bigger deal than people realize. Or, they realize it’s a big deal but don’t want to discuss it. Sex is one of those weird issues people often don’t want to meet head on within the Christian community.

I debated for quite some time if I should include this section in this post. The more I thought about it, though, the more I believe in the importance of sexual energy. How sexual energy is used impacts energy management. This section will not be for the faint of heart, but I will attempt to not be too graphic either. I do believe the topic needs to be discussed, though, in light of an overly sexualized culture. I have extended a warning!

God designed human beings as sexual creatures. He gave them a sex drive for specific reasons. He wants His people to “be fruitful and multiply” (Gen. 1:28, NLT). He created human beings with sexual desires for pleasing spouses, as well as for personal enjoyment.

However, western culture is over-sexed. Sex whenever and with whomever one wants has become the norm. Sex education begins at an early age in the public school system. Students can get free condoms at school. Because of the relative anonymity of online pornography, porn addiction has become a huge problem as well. Twenty-first century technology combined with mankind’s lust-driven sin nature has not been a good combination for anyone.

Unfortunately, Christians are not immune from this over-sexed culture, either. In many ways, I believe Christians may have more challenges in this area. The majority of believers do (possibly) believe God’s Word teaches sexual activity outside of marriage is sin. Whether they practice this belief, though, is a whole other issue. This is why so many believers carry around a lot of struggles, hang-ups, hurts, and guilt when it comes to sex, singleness, marriage, divorce, and re-marriage.

As a Christian man who has had his own unique challenges in this area, I have noticed a big difference in quality and quantity of sexual energy as I have moved into mid-life over the last several years. As this shift has occurred, I’ve also realized how high testosterone levels and enraging pent-up frustrations have drained me of much life energy I had when I was a teenager and young adult.

The challenge for younger Christian men and women who may be over-sexed is how to deal with their sexual energy in a positive way. From my own personal experience, I know it’s a huge challenge. I may have more questions than answers in this area.

Now that I’m entrenched in mid-life (at the time of this writing I’m 46), the sexual energy/hormone issue is not as much of a challenge as it was when I was a younger man. My life energy is more calm, stable, and focused. This has been a freeing experience in and of itself.

Let me add here that sexual drive is important and vital to a productive, successful life, especially for men. A man’s libido is the driving force that propels them to do anything and everything. A focused love/sex life in a monogamous relationship between a husband and wife is what has created thriving civilizations and cultures around the world. Comparing cultures that have thrived over a period of time versus those that have struggled, one key factor for those cultures that have flourished is: monogamous marriages between men and women.

In his classic book Think and Grow Rich, author Napoleon Hill talked about the “transmutation of sexual energy.” He mentioned that men of genius used their sexual energy to fuel their creativity. Equally important, though, is the fact that the sexual relationship must include love.

Napoleon Hill says, “Sex, alone, is a mighty urge to action, but its forces are like a cyclone—they are often uncontrollable. When the emotion of love begins to mix itself with the emotion of sex, the result is calmness of purpose, poise, accuracy of judgment, and balance.”

To be successful, happy, and fulfilled, figure out a way to channel all sexual energy into a focused path. The best and most focused path is to love a spouse and engage with them in a physical relationship on a regular basis. Be completely devoted to them in meeting their physical needs and not obsessed with meeting personal needs outside of this relationship.

For those who are unmarried, the challenge becomes greater but not impossible. I’ve known several people who have remained unmarried, yet (at least on the surface) appear successful because they have a singular, focused pursuit in which to release their sexual energy. This focused pursuit could be a hobby (such as music), their occupation, or a life goal accomplishment.

Control sexual urges. Marry the right person. Love that person wholeheartedly, and meet their needs. Transmute sexual energy to fuel creativity. Then, go out in the world and do amazing things with focused energy!

In Financial Peace University, Dave makes it clear that he hates whole life insurance products. He encourages everyone to buy term life insurance and then invest the difference normally paid for a whole life policy. There are many in the personal finance world chanting the exact same mantra. I get it. I understand most of the reasoning behind the debate.

When I first heard about the whole versus term life insurance debate around 2004, I immediately bought a decent amount of term life insurance to protect my family. Then, I turned around and canceled my variable universal life (VUL) policy that I had been suckered into by a “friend” and his buddy life insurance guy a few years earlier. I was too ignorant back then and didn’t understand the various forms of life insurance. I had no clue on “good” and “bad” forms of life insurance. Fast forward a few years. I now have in place a newer, larger, quality, twenty-year term life policy. I have peace of mind knowing my wife, four daughters, and son will have the resources they need if something happens to me.

Bank On Yourself: The Infinite Banking Concept

A few years after buying this latest term policy, I ran across several books and blogs recommending a new financial product (which is really an older way of doing life insurance) called the Infinite Banking Concept (IBC). The basic idea behind IBC is the reality that most American families will finance large ticket items such as cars, college, and homes. When financing these items through conventional banking methods, borrowers are throwing away thousands of dollars in interest that they could be recapturing for their own personal benefit. When properly set up, an IBC utilizes a form of permanent, whole life insurance to create a personal “bank” of money to borrow from, that also has some tax advantages tied to it (assuming that the Federal government doesn’t mess with these policies in the future).

Let me say upfront that I currently do not have an IBC. At the time of my writing this book, I’m still in the research and investigation phase. My first impression after reading several books and web articles on IBC is that the concept and its application in this way are intriguing. The idea of building up a storehouse of wealth over several years in which the person, in theory, becomes his or her own bank seems rather ingenious to me. But, because I have heard the whole Dave Ramsey rant on whole versus term life insurance for so long, it has taken me a while to process the concept.

… Dave Ramsey is a radio talk show host who (admirably) counsels people on how to get out from their crushing debt load, through obvious but crucial things like making out a budget, communicating with one’s spouse on financial affairs, etc. Ramsey is very entertaining and I can certainly understand why his show is so popular. However, Ramsey absolutely has it out for whole life (and other types of permanent life insurance) policies, advocating instead that people “buy term and invest the difference.” For example, in a post from his website, Ramsey implies that you won’t have any cash value for the first three years of a new policy. He goes on to explicitly say that the rate of return on your money is much higher in mutual funds, that you won’t need life insurance after 20 years if you follow his plan, and that the insurance company keeps your cash values when you die, giving your beneficiary only the death benefit.

Every one of these (typical) objections is either misleading or downright false, at least when it comes to Nelson Nash’s IBC approach of using whole life policies. First, if you set up the policy properly with a “Paid Up Additions (PUA) rider,” then right off the bat, a portion of your periodic payment is buying a chunk of fully paid-up life insurance. Thus, your cash value begins rising immediately, and you can begin borrowing against your policy right away (if you need to).

As far as comparing rates of return, again the problem is that Ramsey is viewing permanent life insurance as an investment, rather than a cash flow management strategy. Yet even if we use the standard tools of financial analysis, it is a non sequitur to point out that a mutual fund is expected to have a higher 30-year (say) average annualized rate of return, compared to the internal rate of return on an insurance policy’s projected cash value growth. Such a bald statement ignores the difference in risk between the two strategies. (Whole life insurance policies have guaranteed minimum rates of return. Do equity-based mutual funds have that?) Ramsey could just as easily “prove” that nobody should ever buy a corporate bond, because stock issued from the same company will always have a higher expected return…

By making these comments, I’m not “proving” that more life insurance is always the best thing to buy, from a conventional “asset class” allocation perspective; otherwise we would have the absurd result that everybody should put every last dollar of his wealth into life insurance policies, with nobody owning stocks, bonds, real estate, or precious metals. (Obviously somebody has to own a share of corporate stock or a piece of real estate, and that ownership must be voluntary. So their prices adjust to make it attractive for someone to acquire and hold.) All I’m making is the modest point that in Ramsey’s critique of whole life and related insurance policies—when he compares them very unfavorably with “buy term and invest the difference in mutual funds”—he isn’t even attempting to set up an apples-to-apples comparison of the two strategies. He’s pulling one set of statistics—internal rates of return—out of context and trumpeting them as if they’re decisive, when the actual situation is much more nuanced.

When IBC policy holders take out a policy loan to personally finance large sums of money, they must set up terms of repayment with interest. The purpose of repayment with interest is in order for the policy to generate the benefits of the storehouse of wealth system. The good news here is that policy owners are paying themselves back with interest. They are able to bypass the greedy, overpaid executives in the large corporate banks in New York City. This is the beauty of IBC.

Potential Uses for Your Storehouse of Wealth

As I continue doing research on IBC over the last several months, I’ve been asking myself a bunch of “what if” questions such as:

What if I established an IBC, let that policy mature for a few years, build up a storehouse of wealth, and then put this money to work creating more streams of income that create more streams of income?

What if took out a policy loan for a decent amount of money, used it as a down payment for a bargain rental property, and started some new streams of income this way?

What if I took out a policy loan to buy an existing business that had decent cash flow to it already?

What if I used a policy loan to do some peer-to-peer lending?

I do see the potential to use an IBC as a personal storehouse of wealth to create even more wealth. This money could be put to work at higher interest percentage rates and create multiple streams of income. My own next step in the process is to speak directly to a trained professional in setting up an IBC policy.

IBC Core Details

Here are some of the core details of what I understand about the Infinite Banking Concept. First, the policy (or policies—multiples can be set up for family members) must be established in mutual insurance companies. Second, these policies are not the “run of the mill” whole life policies. They are a very specific, specialty product: high-premium, dividend-paying, whole life insurance policies. Third, seek out trained professionals who know the specific mutual insurance companies as well as the technicalities to set this up an IBC properly. Check out the resources at the end of this chapter to find these professionals. Fourth, it will take a few years (perhaps 3 to 5) of premium payments to establish a policy in a position to be a storehouse of wealth. There are methods to speed up the cash value of a policy to tap into these benefits earlier than this. I recommend speaking with a certified professional in IBC to uncover all the many options.

Fifth, when requesting a policy loan, it is just a matter of filling out a form to request the money—and it will be available a few days. The insurance company won’t ask a bunch of personal financial questions or check credit scores like most lending institutions. The insurance company administers and guarantees the value of the collateral. The company actually doesn’t even care if you repay the policy loan. They will simply deduct that amount from the cash value/death benefit of the policy. But, the policyholder cares if it’s repaid, because repayment with the terms chosen accelerates the growth of the policy. Sixth, an IBC policy shouldn’t be viewed an investment vehicle. It should be viewed as a cash flow management strategy with many unique benefits. Seven, creating an IBC policy (or policies) in a family is a way to move away from the corrupt, fiat money system of a central bank. It creates a personal privatized banking system. This is the key distinction and benefit of the IBC. Conventional, commercial banks create money “out of thin air” as well as create all sorts of national financial problems. A privatized banking system such as IBC is based on actual cash values created within the policy.

Sara Blakely may not be a familiar name in the average American home. Some of the products she has created for women, though, would be recognized through her company called Spanx. As a young woman, Sara pursued several different business opportunities that were not working out for her. Before starting her own company, she was selling fax machines door to door. Sara recalls that this time in her career was a great learning experience for her. She learned how to handle rejection through hearing lots of “no’s.” She also learned how to get to a “yes” as well. The art of the sale was a valuable lesson she learned as she finally launched her own company. She also learned another valuable lesson—visualizing becoming successful.

Photo by Mike Mozart

Blakey says she could see her business succeeding from the beginning. She visualized herself being the successful owner of Spanx. Blakely says, “I believe you can take mental snapshots of your future and what success looks like to you. If you mentally see yourself in a scenario, you’ll start to make decisions in your life that get you there.”

Sara Blakely thinks differently than most people. As a result, Forbes Magazine has recognized her as the youngest self-made female billionaire in the world.

Wealthy People Think Differently

Wealthy people think differently at many different levels. I’m not talking about the NBA basketball player who has the $10 million crib with ten expensive cars parked out front, either. One could make the argument that many professional sports athletes handle their money like poor people who have won the lottery. But, I digress.

Photo by Emma Lopez

When I mention wealthy people, I’m talking about people who have learned to generate income through the purchase of assets and not liabilities. This is the classic Robert Kiyosaki definition that he outlines in his book Rich Dad, Poor Dad. The world has too many people running around today who appear wealthy. If one dug down into their finances, though, they would find they are actually quite poor. They have too many liabilities and not enough assets that generate income for their families.

Wealthy People Ask Questions

Rich thinking doesn’t mean driving a hoopty and living in a double-wide trailer while being the rental house king in our respective city with thousands of dollars in savings and investments. But before signing up for a book of payments on a $40,000 SUV or buying a $750,000 mortgage for the most expensive house in a great neighborhood, many questions should be asked. Wealthy people ask themselves money questions, such as:

Am I buying assets or liabilities?

Is this the best use of my money right now?

Is there a better place or better opportunity to leverage my money?

Do I need this particular item right now?

Is this a true need or a want?

What is the wisest thing I could do with this money, today?

For the Christian who is attempting to live according to these principles, this adds another layer of spiritual thinking. Additional questions could include:

Would God be pleased with this purchase? Why or why not?

Will this purchase impact my level of giving in the future?

Have I prayed about this purchase, or am I engaged in a worldly mindset?

Is this the absolute best use of God’s money?

If I make this purchase, would God be able to say to me, “Well done thou good and faithful servant”? Why or why not?

There are several key differences between the rich and poor concerning financial thinking. Wealthy people process money information, ask themselves a lot of questions, and seek the wise counsel of others they trust. Poor people follow the poor money habits of the majority of people around them. The poor make emotional purchases based on popular opinion and feelings instead of an overriding financial plan.

In the book Financial Fitness: The Offense, Defense, and Playing Field of Personal Finance by LIFE Leadership (Brady and Woodward), the authors include a recommended investment strategy they call the “investment pyramid.” The plan starts at the bottom of the pyramid with what the authors view as the safest form of investing. Then, they encourage readers to work their way to the top of the pyramid to what they view as riskier forms of investing. There is validity to the investment pyramid concept, and it is definitely a unique way of looking at investing. This step-by-step investing approach is not taught in Financial Peace University. After a fully funded emergency fund is established in Baby Step 3, Dave jumps into Baby Step 4—Invest 15 percent—and then talks about 401(k)s and IRAs. If you charted Dave’s action on the investment pyramid, he moves from a Level Two emergency fund directly to Level Six stock market investing. He completely bypasses Levels Three, Four, and Five. Dave would appear to have a lot more risk tolerance than Brady and Woodward.

The Seven Levels of the Investment Pyramid

Level One, the bottom of the pyramid and the safest part of this investment strategy, is to invest in one’s self. What Brady and Woodward are referring to in this level is learning to think wealthy thoughts. Investing in education and training will take a person farther into their careers as they believe they can go. This investment into personal growth may even take a person into another career or area of expertise. I’m not talking about spending a bunch of money to go back to college and finish another degree, either; I’m talking about educational investment through reading relevant books, magazines, and blogs. Or, it can be as simple as listening to audio books, training programs, and podcasts, or attending conferences. Allow other leaders in the industry to be mentors. There are many ways to invest in one’s self that will cost more in time than in money. Investing time and money at the base of the financial pyramid will lay a firm foundation before advancing into other complex forms of financial investing.

Steve Siebold is a former professional athlete and national coach. He has spent the past twenty-six years studying the thought processes, habits, and philosophies of world-class performers. Steve has interviewed more than 1,200 of the world’s wealthiest people. According to Siebold’s research, “Self-made millionaires get rich because they’re willing to bet on themselves and project their dreams, goals, and ideas into an unknown future.”

Level Two, the next level of the pyramid in which to invest, is an emergency fund. This level is equal to what Dave teaches in Baby Steps 1 and 3. Baby Step 1 is get $1,000 in savings as fast as possible and then get out of debt as fast as possible. After completing the debt snowball in Baby Step 2, the next goal is to establish a fully funded emergency fund of three to six months of expense money in Baby Step 3. Depending on income, expenses, and needs, this could equal out to a range of approximately $10,000 to $30,000.

Level Three advances to investing in survival preparation. An important point to consider when it comes to this level is that survival preparation is a form of savings. It is translating money into purchasing important goods such as food, water, generators, fuel, guns, and ammo. This is to protect the family during a worst-case scenario and an important part of a sound investment strategy.

Level Four focuses on investing in long-term and targeted savings. Brady and Woodward recommend that regularly saving 10 percent of total income into typical savings accounts. They favor safer investment strategies than Dave does. At this level, they also recommend people have targeted savings accounts (sinking funds) to save for car replacement, new furniture, and so on.

Levels One through Four are conservative levels of investing in one’s self with little risk. They are basic levels of savings. Brady and Woodward contend that if people focused only on these four levels of the investment pyramid, people would do well, financially. The authors reserve the final three levels for what they consider more speculative investing.

In Level Five, people should begin investing money into secure investments such as CDs, money market accounts, and municipal bonds. Many financial experts (including Dave) undervalue these investments because they pay lower interest, but they also carry lower risk.

Brady and Woodward consider Level Six and Seven to be highly speculative investing. In fact, their recommendation is to avoid the top of the pyramid altogether, unless the investor is knowledgeable in the areas of real estate, the stock market, ventures, and start-ups. Deciding to invest in Level Six and Seven involves a willingness to put money in these areas that wouldn’t be missed if it were lost completely.

Scott Adams is the creative cartoonist who came up with the “Dilbert” comic strip. He has done many interviews with online magazines and podcasts about his own unique morning routines.

Several years ago, Mr. Adams created a morning routine in which he could manifest his best, most creative work in the early morning hours. Now, he is the first to admit that he isn’t always creative during this time. He structures his morning schedule in such a way, though, to allow himself to get into a creative state if possible. Adams says, “Creativity is not something you can summon on command. The best you can do is set an attractive trap and wait. My mornings are the trap. I wait for the ideas to arrive at their leisure, like a hunter in a duck blind. And in order for the trap to work, I exercise tight control over my physical environment.”

Scott wakes up early each day, anywhere between 3:30 and 5:00 a.m. His first twenty minutes of the day are always the same. He makes it to his home office desk within ten minutes of waking up. He then sits down, eats a protein bar, and drinks a cup of coffee to be energized for the morning.

After eating, he then “primes the creative pump” with positive news. His favorite news source is Business Insider. He claims they have a good mix of business and technology, which is the perfect fit for the “Dilbert” comic strip.

He says that four hours of creative time each morning flies by. He hardly notices the clock, and by 10:00 a.m. he states that he has written “two ‘Dilbert’ comics, a blog post, a few experimental comics posted on Twitter, four clever tweets, a ‘Dilbert’ movie scene, and an email about a new idea for my startup team at CalendarTree.com.

By late morning, Adams finds he has spent his creative energies. As he approaches lunchtime, he prepares to go workout at the gym. He will repeat the same routine the next day.

Photo by Dennis Amith

Do The “Big Rocks” First!

In Stephen Covey’s classic book The 7 Habits of Highly Effective People, Covey gives us the well-known illustration of the glass jar. In this example, you take a large clear container and attempt to fit water, sand, pebbles, rocks, and then several large rocks. In this visual illustration, Covey demonstrates that in order for everything to fit in the jar, it must be put in the jar in descending order: large rocks first, followed by smaller rocks, then pebbles, sand, and water. This illustration is a visual representation of our daily schedules. In order to accomplish the “big rocks” in life (in Covey terminology, the important but not urgent), important items must be scheduled first before all the smaller stuff crowds them out.

In the life of Scott Adams, we see the “big rocks” principle at work. Adams knows exactly what he needs to do in his creative work life to be successful and generate the income he needs to accomplish his goals. He has engineered his entire morning routine to complete all those important tasks before anything else gets done in his day.

Life Circumstances Created My Own Morning Habits

A few years ago, I went through a process of establishing a regular morning routine. My routine came about as a result of going through one of the absolute worst experiences in my entire life.

Professional counselors have ranked divorce as the second most stressful life event. According to the Holmes-Rahe Stress Inventory it carries a stress level of 73 out of 100. I can testify from personal experience that this statistic is true.

During this challenging time in my life, I dove deep into an early morning routine just to keep my sanity! I would usually wake up around 5:00 am and spend some time reading through my Bible. Then, I would spend time on my knees in prayer, asking God to bring healing to an impossible situation. After that, I would spend time writing a couple of pages in a journal about my problems and personal journey. I would wrap up my morning routine with writing blog posts on my first Christian personal finance blog.

My own experience with establishing a solid morning routine for the last seven years has been nothing but positive. I am more productive and focused in every area of my life, including the spiritual, emotional, physical, relational, and financial. By setting aside time in the early morning hours, I am also working on my major life goals with intentionality and consistency.

I believe practicing these morning habits on a consistent, daily basis over time will produce amazing results in all areas of life. I can testify that these routines are just as critical to financial success as a well-diversified retirement portfolio.

Having a solid, purposeful morning routine will propel a person on a path to successful living that translates to every area of life.

I’m in the midst of changing some things up here on my personal website. One of the biggest changes is creating a more useful email list to you, my readers!

Beginning today, I have created a new email list in which you will receive a monthly financial book review from me, Larry. You see, over the last several years, I have been in the process of literally devouring over one hundred personal finance books. I’ve taken copious notes. I’ve highlighted a lot of material. I’ve learned a lot. I’m in the processing of translating this goldmine of information into useful action steps for your personal finances.

Each month, I will email you exclusive book review material that I won’t publish anywhere else. It won’t be on the blog. If you want to glean some “nuggets” from all my personal finance reading, then sign-up in the contact form below. Happy Reading!

Have you ever discovered something in life that really captures your interest?

Something that consumes your thoughts? Something that drives you to spend more time, energy, and resources on that one thing? That one thing you want to be excellent in above all other things?

When I was a young man, playing the trumpet was my one thing. My parents and I poured our “extra” time, energy, and financial resources into my fledgling music career.

I practiced at least three hours a day. My parents and I travelled across town 45 minutes in each direction in order for me to take trumpet lessons once a week. I played in three different area civic orchestras which not only took rehearsal time to participate in each week, but lots of travel time and personal energy as well.

We spent money on gas getting from one music activity to another. We spent money on lessons. We spent money on music, new trumpets, accessories, and repairs. We spent thousands upon thousands of dollars in a hot pursuit of excellence for me to be the best trumpet player I could be.

Have you ever had one thing that has driven you to attempt to be the best at in this life?

Excellence In Giving

Have you ever considered that God wants us as Christians to be excellent in the area of giving? With that same passion, drive, and energy that we put into our own pursuits, God wants us to put that into giving as well.

In 2 Corinthians 8:7, we read these words written by the Apostle Paul to the church at Corinth:

But since you excel in everything—in faith, in speech, in knowledge, in complete earnestness and in the love we have kindled in you—see that you also excel in this grace of giving.

The word excel used in this verse carries with it the idea of abounding or overflowing. Excellence in giving means we aren’t just meeting the minimum requirements. We are going above and beyond the minimum.

Paul tells these Corinthian Christians that they are excellent in a lot of important areas. They are putting in a lot of time, energy, and resources into other areas of their Christian walk – faith, speech, knowledge, earnestness, and love. He reminds them to put that same kind of passion, that same type of enthusiastic energy into the area of giving.

In the eyes of God, good enough doesn’t cut it when it comes to this area of giving.

Questions:So, how about you? Are you excelling in this grace of giving? If not, why not? What do you need to do to start excelling in this area of your life?

These are the thoughts I had a few weeks ago when I learned that one of my former church orchestra members had past away in his sleep.

My friend had moved out-of-state a few years ago for a new job position, so I hadn’t seen him in quite some time. As the news sunk in and became reality for me, I thought about my friend and our relationship. I reflected back on my memories with him.

I was under the assumption that his funeral would be out-of-state where he currently lived, but then, the phone call came. His wife asked me to officiate his funeral here in town. They were shipping his body back in order to do a local funeral for all the family members. She told me that he would want me to officiate his service.

Deep down, I knew she was right.

[Gulp]

What do you say to a request such as that? A request way outside of your comfort zone.

Honestly, I’m not a huge fan of attending funerals, let alone officiating one for someone I know.

I’m Not Qualified

I have officiated several weddings, but only one funeral. That one funeral was relatively “easy” to officiate because I didn’t personally know the person who had passed away. I had no emotional connection.

But, with my friend, I did have an emotional connection. I knew this was going to be difficult for me to do.

So, how do you deal with a challenging, uncomfortable role such as this that you really don’t feel capable of fulfilling?

6 Thoughts On Filling A Role You Really Don’t Want To Fill

Here was my approach to filling this role that I was asked to do:

Acknowledge the need. The family needed an officiant for the funeral. It would need to be me or another minister. Deep down, I knew my friend’s wife was right. I couldn’t argue with her. I knew that my friend would want me to officiate his service. I had to accept this role, even though it was going to be extremely uncomfortable and emotional for me.

Be confident in whatever experience you do have to help you. The biggest argument I had against doing this service was lack of experience. I had only preached one other funeral several years ago. But how do you gain experience preaching funerals? There’s only one way, by preaching funerals. Yes, I do have public speaking experience. Yes, I have script writing experience. Putting together a funeral script and preaching that script may be challenging for me, but I know that I have enough experience to do this. Be confident in the abilities God has given you.

Seek advice. As soon as I knew I was going to need to prepare this funeral service, I started emailing a couple of other pastors I know for advice. They gave me some great ideas, and I was off and running in getting the funeral script and service put together.

Prepare heavily. I spent quite a bit of time writing and re-writing the funeral script. Then, I spent additional time reading through and practicing the script. I visualized myself standing before the family and his friends as I delivered the various elements of the service.

Pray for strength. When I was in the car driving to the funeral that morning, I spent quite a bit of time praying to the Lord for supernatural strength. He provided exactly what I needed, when I needed it!

Be Authentic. I’m an emotional guy. I’ve been this way since I was a small boy. I probably could have done a better job fighting back the tears as I preached my friend’s funeral, but I allowed myself to feel the emotions of losing him. I was really in tune with the words that were coming out of my mouth. I wept occasionally as I spoke. I was overcome with emotions. In many ways, I felt like a failure as a funeral minister, but I had several friends and family members approach me after the funeral saying what a wonderful job I did. People appreciate authenticity over “having your act together.” Isn’t it strange how that works?

Questions:Have you ever had to assume a role that you really didn’t want to do? Do you agree or disagree with my approach? What was your approach?

Christian stewardship isn’t always the easiest topic to tackle, especially in a book format. If approached in the wrong manner, the subject matter can come across as dry and boring, or even worse, as legalistic and condescending. Dr. Knapp did an excellent job with his approach on the topic of stewardship. I found his book to be entertaining, and at the same time quite convicting!

6 Key Aspects Of The Book That Make This Book Worth The Read

There were several aspects of this book that I really enjoyed. Due to these key parts of the book, I know I will find myself coming back to this book for future research and inspiration in the area of stewardship.

Here are the 6 key aspects of the book I enjoyed:

A Quick and Easy Read. As I mentioned above, the topic of stewardship can be potentially stuffy and boring to many, but I enjoyed Dr. Knapp’s approach to this book. Each chapter was concise, had a good flow, and got straight to the point. Nicely done.

The Concept of Well-Digging. The opening chapter talks about this interesting idea of digging wells. I had never consider this approach in this way before, but it does make complete sense to me. I had one of those “I could have had a V8” experience when I read through this particular chapter. Dr. Knapp explains that “ … wells symbolize God’s provision and blessing. Abraham dug many wells, which were later filled with dirt by the Philistines, a type of the enemy.” You can read Genesis 26:18-19, 22 as well as Isaiah 12:2-3 for the Old Testament inspiration for the overall concept. Here’s a very brief synopsis of what Dr. Knapp writes about “well digging”: “When a well has been properly dug, the water flows freely into it. The water from a functional well will always be available, not only to us, but to others around us. The devil, however, will constantly try to throw unbelief into our wells to dry up our faith in that area … Digging a well is an active spiritual process, not a passive mental one.”

Personal Stories from the Author’s Life. Stories are always excellent ways for an author to connect with his audience. Dr. Knapp shared several of his own personal stewardship stories that were interesting and convicting. His stories were a great reminder that I still have much to learn in the area of stewardship.

Stewardship Testimonies from the Lives of Others. Not only did Dr. Knapp share his own stewardship stories, but he also included several stories and testimonies from others. These were very inspiring as well. I’ll probably be “stealing” some of these stories for a few Giving Talks at my church in the near future.

Tons of Scripture to Support Each Chapter. At the end of every chapter, Dr. Knapp listed a lot of Scripture to support the particular concept he was teaching for that chapter. I will definitely be using this part of the book as a resource as I teach on key areas of stewardship.

Written-Out Stewardship Prayers. Most chapters of the book have a written-out stewardship prayer of confession. I’m definitely coming back to these for inspiration for public prayers with our congregation.

If you have a passionate desire to grow deeper in this area of Christian stewardship, then I highly recommend picking up a copy of this book.